Donna Genie explains the tax rules for business meals and entertainment after 2018. Meals are 50% deductible if you have a bona fide business discussion with clients or colleagues, but entertainment expenses are no longer deductible at all. You need to document the amount, date, place, participants, and business purpose.
50% deductible (as stated).
0% deductible (no deduction).
Effective in 2018.
Lets talk about meals and entertainment expenses.
First off, there have been some law changes. Effective in 2018, meals expenses are still.
50% deductible as they have been in the past.
So whether it's Morton's or McDonald's, you'll.
Get 50% deduction on meals.
There is 0% no deduction for entertainment.
Expenses beginning in 2018.
Now, to qualify for a meals expense, it must be a bona fide business discussion. That means that it's with a client, a prospect, a referral source, a business colleague. You must be dealing in business while eating. So the meals. You must document your meals further than.
You do most other expenses to get the deduction.
If you pick up the receipt from.
The restaurant, you're going to have three of the five elements typically on that receipt.
How much, when, the date, where you were, the restaurant name, the business purpose.
And the business relationship must be entered.
So indicate who you were with and what you discussed. Now you don't have to write an essay, but you do have to have proper details. So you can't just write business. So you would.
A good example might be if I met with a colleague to discuss the new tax law.
I met with a prospect to discuss.
Their operations and expansion of their business.
Those types of things are deductible as meals. Remember, still at 50% deduction. Meals and entertainment used to have a.
100% deductible meals expense.
If you were bringing in food for employers convenience, that is no longer allowed after 2018.
And all meals are still at 50% deduction. Entertainment is no longer deducted after 2018. So things like sporting events, entertainment like golf or hunting, going out and buying.
Tickets to things are no longer allowed.
Okay, so you'll get a zero percent deduction on those.
So the key try to convert those.
Into more meals type expenses to manage your deductions. Also, there's no law change on this. But still, country club dues are not deductible.
If you do go to a country club and you have a meal there.
You can still deduct the cost of.
The meal, but the cost of the.
Dues or playing golf or things like.
That are no longer deductible.
